According to the managing director, there is still a "steady stream" of Cat B orders. To back up his claim, he pointed to the number of bids in Wednesday's tender, which was higher than in the previous round.

He said: "That means bidding strength was soft and it could perhaps be that dealers with orders are unable to deliver cars just yet due to low stock levels.''

As for Cat A, the premium did not sink as much despite the increase in quota because "there is still some support", said the senior manager of a popular Japanese dealership. "There is a backlog of orders from last month,'' he explained.

But the economic uncertainty and Chinese New Year period are definitely behind the lower Cat C premium despite its one-third cut in allocation.

One commercial vehicle dealer said demand is "generally weak'' because of poor business sentiment.

This, he said, has also affected the ETS take-up rate, which recently slowed down. Under ETS or the Early Turnover Scheme, owners of older diesel vehicles are incentivised to replace them with cleaner Euro V models without having to bid for a COE.

He added: "Business owners are also busy with other activities over Chinese New Year, and buying a new goods vehicle is not on their list of priorities. I believe all these reasons played a part in bringing the Cat C premium down.''